List Of Documents NRI's Should Have While Purchasing A Term Insurance Policy

Uncertainty is the only certainty of human life. As it is an unprecedented roller-coaster ride, we must always keep ourselves financially prepared to handle the rainy days with a confident grip. One of the best ways of securing the future is to purchase term insurance. It acts as a safeguard for your capital reserve, guaranteeing a safe future ahead in the long run. Every person is eligible to purchase a term plan, including the NRIs.

The Procedure Of Buying Term Plans For NRIs:

As the Indian Diaspora forms an indispensable and intangible part of the Indian population across the globe, it is best that they carefully choose the term plan they buy, according to their specific needs and demands. There are two procedures by which they can acquire befitting term insurance. Firstly, as an NRI, you can buy a term plan, during your visit to India. The entire procedure is quite simple and is similar to that of a resident Indian. Otherwise, you can also buy a term plan from your current place of living, which can be performed through mail order. However, if you buy insurance like this, it requires more detailed verification, conducted by the concerned officials of the Indian embassy and occasionally, the notary.

Terms and Conditions Of Buying an NRI Term Plan:

• Premium:

  NRI special term plans possess flexible terms and conditions and the assured sum can vary anywhere between INR 2 lakh and INR 1 crore. The premium value of the term insurance for NRIs depends on the respective terms and conditions, premium payment frequency, health condition of the policyholder, age, occupation, etc. Depending on the circumstances, the policy tenure can range between 5 years and 30 years.

• Type of bank account:

  To buy a term plan, your age must remain between 18 years and 65 years, or in some cases, the upper age limit is 55 years. You can pay the premium cost for the concerned plan through online mode. For that, you need to possess a valid bank account in one of the banks enlisted in the policy documents. It can also be done using a remittance in the concerned foreign country, through an NRO bank account or an NRE bank account.

• Regulation:

  It must be remembered that the premium value and the level of risk involved remain unaltered in the case of NRIs, as compared to resident Indians. However, as per the IRDAI regulations there are certain additional guidelines that needs to be fulfilled for an NRI and this includes an NRI Declaration which includes the following details:

• His current country of residence and his tax status.
• His tax status in India.
• The source of funds by which he is paying his insurance premium, in order to control money laundering.
• Declaration under the DTAA under the Agreement from India.
• Payment of premium is from his NRE or NRO account so that the claim, if any would be payable to the same account for the purpose of taxation.
• Confirmation and approval for deduction of TDS.

However, there are certain additional documents that an NRI would have to submit at the time of applying for a term insurance in India, over and above the resident Indians.

List Of Documents Required:

While buying term insurance for NRIs, the concerned party must fulfill some conditions regarding proper paperwork. The list of term insurance documents needed is:

• Attested copy of the passport of the policyholder as well as the insured (in case they are different).
• The proposal form or the application duly signed by the policyholder.
• The concerned health check-up reports or related documents mentioning the health status
• Valid income proof along with a copy of Tax Residency Certidicate or TRC.
• Valid age proof of the insured.
• alid address proof of his local address in India (with contact details) and the current country of residence along with his work permit, visa, etc.
• The amount equivalent to the first calculated premium value requires to be paid.

These are the term insurance documents that NRIs need to submit while buying a term plan. For premium payment, there remains a specified grace period. If you forget to pay the premium within the stipulated due date, you can pay it within this grace period.

What Happens If You Become An NRI After Buying a Term Plan?

If you have bought a term insurance plan as a resident Indian, and then become an NRI, you need not worry about it. You can simply write an application to your insurance provider, requesting them to keep your policy alive as you move to a different country. You have to provide all the necessary details of your changed address. Providing the relevant list of term insurance documents is an indispensable part of this purchase. This is the standard practice that most of the insurance providers of the country follow to keep the concerned term plan active for the NRIs.

As an NRI, you can easily buy a term plan in India or retain the existing one. However, before you single out anyone specific plan, you must conduct thorough research to get a clear idea about the plan and the range of its coverage and assess if it is sufficient or not. You can change the frequency of the premium payment and continue with it without any default till the time of the next annual payment, before switching the plan in case of any dissatisfaction.

Also Read: What Documents Are Required While Filing a Term Insurance Claim?